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Gold has had a rough week, no doubt pressured by a rising dollar, weaker demand from Chinese importers, and as one RBC Capital analyst diplomatically put it, "a lack of new geopolitical developments."

Nor did it help matters that Goldman Sachs has issued a report this week stating that it remains skeptical of the 2014 rally in gold. The influential investment bank, as reported by Barrons.com, is sticking to a prediction that the precious metal will fall to $1,050 an ounce by the end of the year, a slump in gold's price of 19% or greater from current levels.

But how to value gold, a metal that doesn't generate earnings or pay a dividend like a typical large-cap stock?

"The purpose of the model isn't to say where gold will go but to look at the underlying factors that drive the price of the precious metal," he writes. "The key to understanding the gold market is understanding that it's not really about gold at all. Instead, it's about currencies, and in our case that means the U.S. dollar. Properly understood, gold is really the anti-currency. It serves a valuable purpose in that it keeps all the other currencies honest—or exposes their dishonesty."

Crossing Wall Street

Unfortunately, Elfenbein's model isn't as easy as dividing one number by another.

Instead, users of the model need to understand concepts like Gibson's Paradox, which is the observation that interest rates tend to follow the general price level rather than the rate of inflation.

For those interested in understanding Elfenbein's model for nailing down gold, read the lengthy post.

Elfenbein's piece comes with a warning. "Let me make it clear that this is just a model, and I'm not trying to explain 100% of gold's movement," he writes. "Gold is subject to a high degree of volatility and speculation. Geopolitical events, for example, can impact the price of gold. I would also imagine that at some point, gold could break a replacement price where it became so expensive that another commodity would replace its function in industry, and the price would suffer."

The bottom line is that there is nothing simple about this shiny rock.

The big problem is that the world's largest retailer's U.S. sales have been as flat as the stock. "In the past four years, Wal-Mart's U.S. same-store sales have grown 0.3%, on average; total sales growth has averaged 2%. In the past year, same-store sales have gone negative," adds the FT.

Financial Times

What strategic changes should Wal-Mart's new U.S. boss, Greg Foran, push for? "First, grow by shrinking: decrease investment in large format stores in the US, close unproductive stores, and continue the push into smaller formats. Second, shift channels and increase investment in online."

Online, the right approach is simpler, the FT writes in its Lex column. "Wal-Mart needs to invest more aggressively. Last year, the company invested an estimated $500 million in online operations. By contrast, it spent almost $7 billion on buybacks. If growth is the goal, put the money where the growth is."

If Wal-Mart can even grow sales in the single digits, that would be something.

I'll close with some reaction to the news that public pension funds are finally showing signs of disgust with hedge-fund performance.

As The Wall Street Journal reports, "Public pensions from California to Ohio are backing away from hedge funds because of concerns about high fees and lackluster returns. Those having second thoughts include officials at the largest public pension fund in the U.S., the California Public Employees' Retirement System, or Calpers. Its hedge-fund investment is expected to drop this year by 40%, to $3 billion, amid a review of that part of the portfolio, said a person familiar with the changes."

As he puts it, "given hedge-fund performance relative to the costs, I assumed a shift would have happened years ago. That it hasn't likely reflects some combination of institutional inertia at big institutional and pension funds and perhaps the impact of consultants."

Bloomberg View

Those consultants have successfully spread the propaganda that investors in hedge funds can expect higher returns over time than what can be generated by stocks and bonds.

"Unless you are one of the lucky few in a top-performing hedge fund -- that means a small fraction of that $3 trillion in assets -- there is simply no logical or statistical basis for this expectation," Ritholtz writes. "It is false, a demonstrably wrong perception, yet one that has become widely accepted."

Of course, Ritholtz understands why the political forces in states are so willing to accept these rosy expectations. "I am well aware that politicians have embraced these false numbers, as it reduces the amount of contributions they need to make each year to public-pension funds. But it also kicks the can down the road, creating an even bigger hole in future budgets."

It's perhaps a little understandable why states continue to delude themselves into thinking that "expected returns" of funds will help cover their growing fiscal responsibilities, including pension liabilities. But individuals who might consider buying shares of hedge funds presumably don't have expanding liabilities. They should be able to look at these investments with clearer eyes.